Diatreme Resources’ chief executive Neil McIntyre said a second phase of test work will examine the need for a reprocessing operation based on gravity separation. 

The test work was expected to take three weeks and would cost less than $5000. 

Mr McIntyre said the extraction of gold ore left in the tailings from a four year operation that ended in 1994 would speed up cash-flow for the company. 

The decision to use gravity separation was due to a recent scoping study that considered the cost and length of time of cyanide leaching.

Diatreme Resources believed the value of gold was projected to drop from $1700 to $1467 an ounce. 

Current gold prices of around US $1300 an ounce show the immediate value of this reprocessing operation,” Mr McIntyre said. 

“We may further enhance the financial viability of this project, decrease the timeline to actual operations and increase potential returns for shareholders.” 

Tick Hill is 110 kilometres south east of Mount Isa and was mined between 1991 to 1994.

In January Mr McIntyre said extracting the low grade ore left in the tailings could be the first step to revamping operations.  

It was estimated to have 680 kilograms of gold buried within the 630,000 tonnes of tailings. The ratio was 1.08 grams of gold per tonne.

The mine site spans three mining leases which were exchanged between Mount Isa Mines and Diatreme Resources in March, 2015. 

Diatreme said that when the open pit and underground mine was operating it produced a grade of 22.6 grams per tonne, making it one of the highest grade gold deposits in recent times in Australia. 

Joint venture partner Superior Resources Limited has an exploration program tasked to find high grades of gold which match that during the operation phase 20 years ago, and is drilling in those areas.